Question

Write a 1-2 page (approximately 500 words) paper on :
**DISNEY COMPANY**

- Part A-Fundamental Valuation:
**Estimate**a growth rate for your firm's Dividends per Share.**Assume**a 12.5% discount rate.**Calculate**an estimated value of a share of the stock using the constant-growth model (Eq. 8-6 in the textbook), also known as the Gordon growth model.**Compare and contrast**your valuation results with the current share price in the market.**Respond to this question:**What changes in the variables would be necessary in your valuation to best approximate the market valuation?

- Part B - Relative Valuation:
**Estimate**a growth rate for your firm's Earnings per Share (EPS).**Determine**an applicable Price-Earnings (P/E) ratio for your firm in 5 years.**Calculate**an estimated value of a share of the stock in 5 years using the P/E ratio model (Eq. 8-10 in the textbook).**Respond to this question:**Would you characterize your stock as undervalued or overvalued? Explain.**Respond to this question:**Based on your valuations in parts A and B, would you invest in this stock? Explain.

Answer #1

using five year model | ||||||||

Estimate a growth rate for your firm's Dividends per
Share. |
||||||||

2014 | 2019 | Rate | ||||||

Dividend payout | 1.09 | 1.71 | 11.38% | |||||

Calculate an estimated value of a share of the stock using
the constant-growth model (Eq. 8-6 in the textbook), also known as
the Gordon growth model. |
||||||||

Now discount rate, | 12.50% | |||||||

Compare and contrast your valuation results with the
current share price in the market. |
||||||||

estimated value of a share | 1.71/(.125-.1138) | $ 152.68 | ||||||

Current share price, 29-mar-2019 | 111.03 | |||||||

looking at this, it seems the stock is under priced as per Gordon Growth Model | ||||||||

Respond to this question: What changes in the variables
would be necessary in your valuation to best approximate the market
valuation? |
||||||||

If we need our calculate valuation to be very close to the market rate, then we need to consider | ||||||||

variable growth model. So we should consider- fluctuation in prices, market fundamental, new products added in | ||||||||

Disney's portfolio, etc. | ||||||||

Estimate a growth rate for your firm's Earnings
per Share (EPS). |
||||||||

30.09.2018 | 30.09.2017 | 30.09.2016 | 30.09.2015 | 30.09.2014 | ||||

EPS | 8.36 | 5.69 | 5.73 | 4.9 | 4.26 | |||

growth rate for four years | 19.25% | |||||||

Price /earning ratio | 13.88 | 16.92 | 15.62 | 19.79 | 19.52 | |||

Estimated share value using P/E model, = PE ratio*EPS | 116.0368 | 96.2748 | 89.5026 | 96.971 | 83.1552 | |||

Actual stock price | 116.94 | 98.57 | 92.86 | 102.2 | 89.03 | |||

Looking at the above results, I believe our stock is over valued as actual prices are more then calculated price | ||||||||

Looking at the investment opportunity and considering the growth rate too. I will invest in stock as its growth looks good considering investment. |

use the following information to answer the questions. The made
up company name is ABC.
Price: $20
R: 12%
G: 4%
D0: 1.10
P/E: 16
EPS: 1.25
Analyst E growth: 7%
Now answer the following below using the above
information that’s provided:
· Part
A-Fundamental Valuation:
1. Estimate a growth rate for
your firm's Dividends per Share.
2. Assume a 12.5% discount
rate.
3. Calculate an estimated
value of a share of the stock using the constant-growth model (Eq.
8-6...

Calculate the intrinsic value for the shares of your selected
company using Dividend growth model or P/E Ratio model. Justify the
workings, if any. Compare the intrinsic value to its current share
price. Is the share overvalued or undervalued? Explain in detail
the rationale(s) of using Dividend growth model or P/E Ratio model
in your stock valuation.
[Hint: The financial data could be obtained from the company’s
annual reports]
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Dividend growth model= D1/(k-g)
=RM0.9/...

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Boehm Incorporated is expected to pay a $1.50 per share dividend
at the end of this year (i.e., D1=$1.50D1=$1.50). The dividend is
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of return on the stock, rsrs, is 13%. What is the estimated value
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Nick’s Enchiladas Incorporated has preferred stock outstanding
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Boehm Incorporated is expected to pay a $1.50 per share dividend
at the end of this year (i.e., D1=$1.50D1=$1.50). The dividend is
expected to grow at a constant rate of 6% a year. The required rate
of return on the stock, rsrs, is 13%. What is the estimated value
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public but is unsure of a fair offering price for the company.
Before hiring an investment banker to assist in making the public
offering, managers at Nabor have decided to make their own estimate
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The recognition that dividends are dependent on earnings, so a
reliable dividend forecast is based on an underlying forecast of
the firm's future sales, costs and capital requirements, has led to
an alternative stock valuation approach, known as the corporate
valuation model. The market value of a firm is equal to the present
value of its expected future free cash flows plus the market value
of its non-operating assets:
Free cash flows...

Common Stock Valuation, Pt. I - Discussion #1
No unread replies.No replies.
Dividend discount model - ex. #1
(Note: This is similar to a former exam question.)
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value of a stock (i.e., P0) that has a par value of $0.10 per
share, a dividend growth rate of 5%, and an expected dividend of $
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1.)Seagate Technology is a global leader in data storage
solutions and a high-yield dividend payer. From 2015 through
2019,
Seagate paid the following per-share dividends:
Year
Dividen
2019
2.56
2018
2.29
2017
1.82
2016
1.18
2015
1.56
Assume that the historical annual growth rate of Seagate
dividends is an accurate estimate of the future constant annual
dividend growth rate. Use a 21%
required rate of return to find the value of Seagate's stock
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